Microsoft to Sell Razorfish to Publicis for $530M

The Publicis Group said today it struck a deal to acquire digital marketing agency Razorfish from Microsoft for $530 million.

“When we complete this transaction, approximately a quarter of our annual
revenues will come from digital communications, and we believe we have more capacity to grow with new clients,” Publicis CEO Maurice Lévy said in a statement. (See announcement here.)

Razorfish will continue to operate under its brand name and will be part of VivaKi, a Publicis entity that includes Digitas, Starcom MediaVest Group, Denuo, and ZenithOptimedia. Razorfish clients include Best Buy, Ford, McDonald’s, Microsoft, and Starwood Hotels.

Razorfish’s management team, including Chief Executive Officer Bob Lord, will remain in place, according to a joint statement issued by Microsoft and Publicis.

In June, Publicis and Microsoft announced they were working together to build upon ways to deliver online offerings to brand marketers. Once the Razorfish deal closes, the Microsoft and Publicis said they plan to expand upon the earlier arrangement.

Going forward, Publicis will be able to purchase display and search advertising from Microsoft over five years on “favorable terms in exchange for certain minimum guaranteed aggregate purchase levels.” What’s more, Razorfish will continue to be a preferred provider to Microsoft for digital strategy, creative, and experiental marketing services.

Microsoft acquired Razorfish in 2007 as part of its acquisition of aQuantive. But Microsoft’s ownership was seen by some as a poor fit and potential conflict because it represented both the ad selling and buying side.

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